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Last update 02/12/2019 The receipt of government grants and assistance by an entity may be significant for the preparation of the financial statements for two reasons. Firstly, if resources have been transferred, an appropriate method of accounting for the transfer must be found. Secondly, it is desirable to give an indication of the extent to … Read more
Last update 24/08/2019 Exact wording: Stand-alone selling price of a good or a service. The price at which an entity would sell a promised good or service separately to a customer. The best evidence of standalone selling price is the price that the entity charges for the good or service in a separate transaction with a … Read more
Last update 06/01/2020 Going concern assumption – Going concern is one the fundamental assumptions in accounting on the basis of which financial statements are prepared. IAS 1 states “When preparing financial statements, management shall make an assessment of an entity’s ability to continue as a going concern. An entity shall prepare financial statements on a … Read more
Last update 20/12/2019 Stand ready obligations – In step two of IFRS 15, an entity is required to identify all of the performance obligations promised in a contract with a customer. In many cases, the performance obligations are readily apparent in the contract. In other cases, promises implicit in the contract may qualify as performance … Read more
Last update 11/12/2019 The IFRS glossary – A basic concepts bootcamp A basic concepts bootcamp to guide readers through accounting fundamentals. Fully up-to-date treatment of key IFRS changes including revenue recognition, leasing and insurance accounting. Specialist chapters on banks, insurance accounting, off balance sheet finance, financial instruments and consolidations. Detailed worked examples throughout, supplemented by … Read more
Last update 20/12/2019 Software warranties – A customer may have the option to separately purchase a warranty on a product (e.g., computer hardware, networking equipment) for a period of time at the point of sale or the warranty may be explicitly stated in the contract. Software warranties Software warranties Software warranties Warranties may fall into … Read more
Last update 16/12/2019 Future operating losses – Example on recognising and measuring provisions Topics hide The Case: Background Future operating losses Related posts: The Case: An entity determines that it is probable that a segment of its operations will incur future operating losses for several years. Present obligation as a result of a past obligating … Read more
Last update 14/11/2019 Next to recording loss allowances based on expected credit losses under the ‘general approach’ IFRS 9 has also made it possible to use a Simplified approach Lifetime expected credit losses for trade receivables, contract assets and lease receivables. Under the “expected credit loss” model, an entity calculates the allowance for credit losses … Read more
Last update 22/12/2019 Fundamental Principles of Value Creation – Companies create value by investing capital to generate future cash flows at rates of return that exceed their cost of capital. The faster they can grow and deploy more capital at attractive rates of return, the more value they create. The mix of growth and return … Read more
Last update 06/01/2020 Similar economic characteristics – This is part of IFRS 8 Operating segments. When evaluating whether two segments have similar economic characteristics, the difference between their gross margins should be measured by their percentage difference, as illustrated in the example below. Topics hide Long-term average gross margin analysis Similar economic characteristics Long-term average … Read more